Highlights reel: ACOSS Poverty Report 2014

We are told that one of the most notable aspects of recent Australian history has been unbroken economic prosperity. We are told about more than two decades of growth, the proceeds of the mining boom, the benefits of deregulation, and ‘dodging the bullet’ of the Global Financial Crisis through clever economic policy measures.

Sure, there have been concerns about the ‘two-speed economy’, youth unemployment and students incurring decades of debt to pay for their secondary education. There have been (partly confected) political concerns about the level of government debt but a lack of awareness about rising private debt.

Beneath all of this, though, as a quietly flowing current in the stream of our national story, there has been an increase in poverty. Some recent reports have traced increasing inequality in Australia but the ACOSS Poverty Report 2014 (released 12 October) focuses sharply on the lives of those Australians living below what we have called, since the Henderson Report 40 years ago, ‘the poverty line’. Four decades on, definitional arguments about poverty continue, alongside studies of the subject and discussion of policy options. Yet some facts are pretty clear.

Following are some highlights from the ACOSS Report, which is the third in a series and uses statistics from 2011-12. Research for the Report was conducted by Peter Saunders, Bruce Bradbury and Melissa Wong from the Social Policy Research Centre at the University of New South Wales. (This Peter Saunders is not the Peter Saunders from the Centre for Independent Studies, who has different views on social policy.) There are forewords from Cassandra Goldie from ACOSS, David Morawetz from the Social Justice Fund, John Falzon from the St Vincent de Paul Society, Kelvin Alley from the Salvation Army and David Thompson from Jobs Australia. The Report includes many references. A media release on the Report is here.

It is unacceptable that after 20 years of economic growth our wealthy nation is going backwards in the numbers of people falling into poverty. As this report shows, most of this poverty is concentrated among the groups of people facing the most disadvantage and major barriers to fully participating in our community. These include people who are locked out of the jobs market, single parents, women and children, people with disabilities, the old, the young, Aboriginal and Torres Strait Islander people, and migrants.

The risk of poverty is highest among people who rely mainly on social security payments for their income. The social security safety net is vital for people who lose their job, fall ill, have a disability, separate from their partner, or retire, yet this report shows that the system is not doing its job to prevent poverty among people who experience these common life events. (Cassandra Goldie, ACOSS, Preface)

Our task … is to transform our personal stories of injustice into a powerful, collective struggle for a new society; a society in which people are not blamed because economic structures lock them out or, in some cases, lock them up; one in which people are not told that they would not be poor if only they chose to be a little more productive. This is our beautiful struggle, we who are many; we who make up the massive movement for progressive social change. We have only one enemy. It is called inequality. (John Falzon, St Vincent de Paul Society, Preface)

In 2012:

The poverty line (50% of median income) for a single adult was $400 per week. For a couple with 2 children it was $841 per week.

2.55 million people (13.9% of all people) were living below the poverty line, after taking account of their housing costs.

603 000 children (17.7% of all children) were living below the poverty line.

40% of people relying on social security payments lived below the poverty line, including 55% of those receiving Newstart Allowance, 47% receiving Parenting Payment, 48% receiving Disability Support Pension, 24% receiving Carer Payment, and 15% of those on Age Pension.

61% of people below the poverty line relied upon social security as their main income and 33% relied upon wages as their main income.

The level of poverty was 13.8% in capital cities compared to 14% outside capital cities.

The proportion of people in poverty was higher than in 2010, an increase of 0.9%, from 13% in 2010. (Executive summary)

Population groups

Women are significantly more likely to experience poverty than men, with 14.7% of women compared with 13% of all men experiencing poverty in 2011-12.

Compared with other age groups, children and older people face higher risks of poverty (17.7% and 14.8% respectively), reflecting the higher costs facing families with children and the fact that many older people receiving the Age Pension do not have sufficient additional income to place them above the poverty line.

Sole parents are at a particularly high risk of poverty, with a third (33%) of sole parents in poverty in 2012. As a consequence just over a third (36.8%) of all children in poverty were in sole parent households. This reflects the lower rates of employment among sole parent households, especially those with very young children, and low levels of social security payments for these families.

Poverty is higher amongst adults born in countries where the main language is not English (18.8%) than amongst those born overseas in an English speaking country (11.4%), or in Australia (11.6%).

The rate of poverty is higher amongst Aboriginal and Torres Strait Islander people (19.3%, compared with 12.4% of the total Australian population … ).

People with a disability face a significantly higher risk of poverty than the average. In 2009 this was 27.4% compared with 12.8% for the total population, and this does not take account of the additional costs relating to disability (for housing, transport and medical services) borne by many people with a disability.

Labour market outcomes and sources of income

The people most likely to be living in poverty are those who are unemployed (61.2%), or in a household that relies on social security as its main source of income (40.1%) and particularly on the Newstart Allowance (55.1%) or Youth Allowance (50.6%) …

For many social security payments, the maximum rate of payment (including Rent Assistance and Family Tax Benefit where applicable) was less than the poverty line, including the Newstart Allowance (which was $97 per week below the poverty line for a single person, and $118 per week for a couple with two children); Youth Allowance ($193 per week below the poverty line); Parenting Payment Single ($20 per week); and the Pension Payment ($26 per week for a single person and $36 below the poverty line for a couple with two children).

The indexation of social security payments such as the Newstart Allowance, Youth Allowance and the Parenting Payment to CPI means that the payment does not increase as community living standards improve; and is likely to result in higher poverty rates over time than would be the case if payments were indexed to wages, as they are with the Age Pension.

Poverty increased between 2010 and 2012 (from 13% to 13.9%); and over the longer term from 2004 to 2012 (the best available data suggests an increase from 11.8% to 12.8%). (Executive summary)

Matt Napier (35) with supporters setting off from central Perth on his 4400km walk across Australia bouncing an AFL football to raise awareness about global poverty (2013) (Flickr Commons/Make Poverty History)

[T]he risk of poverty varies between states and between people living in capital cities compared with the rest of their state … [Also] the risk of poverty is greater outside capital cities.

The overall risk of poverty is higher in Tasmania [15.1%], Queensland [14.8%] and NSW [14.3%] than in the other states [Victoria is 13.9%, WA 12.4%, SA 11.7%, ACT and NT 9.1%]. This may reflect a combination of weaker employment opportunities, higher housing costs, and/or the different age profiles of different states. For example, although average rents are lower in Tasmania than in most other states, it has relatively high unemployment and a high proportion of older people.

The risk of poverty is greater outside capital cities in most states and territories (especially in Queensland and Tasmania), in part due to higher unemployment in regional Australia. The exceptions are New South Wales and Western Australia [12.4%], where very high housing costs in the capital cities have increased the risk of poverty (when those costs are taken into account, as they are in this research). (pp. 28-29)